tv Bloomberg Technology Bloomberg April 19, 2019 5:00pm-6:00pm EDT
emily: i'm emily chang and this is the "best of bloomberg technology." coming up, pinterest and zoom make their public debuts. will investors hit their brakes after a slow start or will it be full speed ahead? we will speak to the ceos of both companies. and a global legal battle that has dragged on for years is over. apple and qualcomm have settled their differences for the next six years. netflix gives an underwhelming forecast in its earnings
results. they are confident that disney and apple will not slow their momentum. but first, pinterest is joining a slew of unicorns heading to public market this year. unlike some of the other big names making their trading debut, pinterest is burning less cash. the social media discovery company is taking a slow and steady approach to growth compared to its peers. i spoke with ben silbermann after the company listed its shares on the new york stock exchange. mr. silbermann: we talked with investors about how people use their products every day. people get inspiration for a whole range of things from the food they cook, to the clothes they wear, to their home. it is less about your friends and not really about following celebrities and the news. we wanted to make sure that everybody understood that. emily: you launched pinterest nine years ago and other
companies have been much quicker and a have seen more losses. why is now the right time? mr. silbermann: we are proud of the progress. the business had reached a level of deductibility that it could be in the public market. we are excited to have access to public market capital. a lot of great companies have acquired other companies in the future. and we have a lot of patient investors and employees, a nice moment to provide liquidity for those parties. emily: investors might say you are just another digital marketing company. what makes your model unique to other platforms? mr. silbermann: the reason people are on pinterest to get inspiration is really lined up with what advertisers want, to inspire customers and get them to buy products and services they really love.
it means it can be additive as long as we do a good job of making sure that they are highly relevant. and candidly, a little bit of an attack. and there is a difference between us and other media properties. emily: the majority of user growth right now is coming and nationally. how much room is there in the u.s. in terms of growing users or is it a story about increasing engagement? mr. silbermann: there is an opportunity to grow over time and increase engagement. they don't know the wide range of different ways that people over the world use their product. it is just really fulfilling for the company to know that the
product works all over the world. emily: what is the plan to grow international sales? mr. silbermann: we are in the first chapter of that story. so we are just in the beginning of the journey but i think it will be a real opportunity to show the results in the u.s. to advertisers all over the world. emily: do you see profits coming soon? if so, when? or are you investing to grow the topline? mr. silbermann: we will continue to invest for the long-term. my eye is always on what will make pinterest great three years, five years, 10 years from now. we're really excited to see it keep growing. emily: pinterest is great at collecting dreams but less on executing them. what can you do to better connect those two things?
mr. silbermann: we are always making sure that people can bridge the gap between seeing something inspiring and doing it. we want to match inspirational images with more and more products at a price point that matters to people from retailers that they trust. we are investing a lot into computer vision technology. if you have a recipe on pinterest, you can see the ingredients. you can see other people's experiences whether it was easy or harder than they expected. emily: you played around with buyable pins back in the day. will social commerce be viable? mr. silbermann: a lot of users want to buy something on pinterest. we just want to make it easier for them to go from inspiration to reality, which in this case,
would be a purchase. emily: that was ben silbermann, ceo of pinterest. and zoom, the provider of video conferencing services went public on the nasdaq. i spoke with their ceo minutes after shares started trading. >> we finalize the price and today was a big jump. there are other things, too. we just go back to work. emily: how do you live up to it now? mr. yuan: the market is huge. over $40 billion of opportunity. our employees so far, they are very excited and very happy as long as we stay humble and continue working as hard as we can. i think we will be ok in the
long run. emily: many people talked about how zoom is a rare unicorn in that you are profitable. should we expect you to grow profits this year or focus on investing to improve topline growth? mr. yuan: i think we should focus on them both. we want to grow for sure. that is our top priority. but we want to have a disciplined approach, right? i think we can focus on growth and of the same time, focus on the positive. emily: you talked about your immigration struggles. the u.s. government denied your visa eight times before they finally approved it. now you're taking a company public. what does that mean to you? mr. yuan: i appreciate the office finally giving the approval.
i think one thing i learned is to never give up. keep trying, keep working hard, and never give up. it is our dream coming true. emily: cisco has begun to offer some of the features that you offer. cisco is your former employer. how do you see competition from cisco evolving? mr. yuan: cisco is a great company. i was there for foreign a half years and i learned a lot. i appreciate all the support i got when i was there. we don't look at them as competitors. we try to be the first to really understand customers problems. to come up with a much better solution.
this market opportunity is huge. we will be ok. we don't focus on our competitors. emily: and what about google? why should customers use your products instead of google? mr. yuan: i use google products as well. i use gmail, google calendar, and youtube. google is great on many fronts. search, youtube, mobile phone. but with conferencing, i think that we spend more time on that. we really care about our customer more than any other vendors. that is why customers like our solution. anywhere, any device. i think we spend more time and allocate more resources on that. emily: do you see taking more market share away from
competitors? or do you see growth in the video conferencing space? mr. yuan: that is a good question. we built up a platform. we can allow third-party partners and developers to build on the application. videoconferencing is a brand-new market. it opens up so many user cases that we never thought about. there is a learning application, a huge opportunity. emily: what are the opportunities ecb on videoconferencing? -- you see beyond videoconferencing? mr. yuan: in the next several years, they are all going to migrate to the cloud with solutions. this is part of the video. it is another growth opportunity.
emily: zoom is more exposed to the chinese market than other u.s. tech companies. what have you learned from navigating the chinese market and how much more growth the you think you will see their? -- there? mr. yuan: i think that there are not many that are successful as a software service company. we will focus on that market, but we are busy focused on the north america market, japan, australia, and europe. we focus on business productivity. and we focus on marketing in india and china. for now, it is not our priority. emily: that was zoom ceo eric yuan. soon after a devastating fire engulfed notre-dame cathedral, news outlets began streaming broadcasts on youtube that included several clips including a box of text.
it combated conspiracy theories including those that questioned the 9/11 attacks. it labeled the plumes as 2001, triggering a panel below the video. these panels are triggered algorithmically and someone said the system sometimes make the wrong call. coming up, after years of battling it out, qualcomm signs a deal for royalties with apple to end a global legal dispute. and if you like bloomberg news, check us out on the radio, the bloomberg app, bloomberg.com, and on sirius xm. this is bloomberg. ♪
forecast like the one i got him in trouble in the first place. he said the company will build over 500,000 cars in the next year. the sec argued he was in consent -- contempt of a settlement reached last year. craig, what happens this time? craig: this is similar to a post he sent in february. he said the company was going to build about 500,000 cars this year. around that time, the in-house securities lawyer at tesla who was named to a position or hired as a result of a settlement with the sec reached out to elon musk and worked with him to send out a follow-up tweet to clean the first one up because it was inconsistent with past statements. there is a statement where musk
himself contradicted a written statement on an earnings call. they tried to clean it up. the sec took notice and reached out to his lawyers. and we find ourselves in this contempt of court fight. it is also based on context clues, it did not look like it was run by a lawyer. it was in passing, a reply to some person on twitter. it read as though musk was doing something very similar, casually talking about how many cars they would make. the sec argues that is material information is something that he supposed to clear with a lawyer within tesla. emily: elon musk flies close to the sun, which is what many investors love about him.
but if the information is correct, is he allowed to tweet about it? craig: the judge that is overseeing this case told both sides within the last couple of weeks to put their reasonableness pants on. those were her words. to go back and revisit this agreement and come to an agreement about what is and isn't material. and what the protocols are for musk. he does not like this agreement. he and his legal team have reacted to the sec, wanting to do battle over this again. emily: expedia group is wanting to simplify and boost value. they are holding a $2.6 billion all stock deal. it is divided between two billionaires.
one will become the largest shareholder with a 29% stake. apple and qualcomm agreed to end a two-year legal battle over billions of dollars of tech licensing fees that threaten to jeopardize qualcomm's most profitable line of business. shares of the chipmaker surged over 20% on tuesday. we spoke to a guest from san francisco and mark from outside the courthouse in san diego. >> we were in round three of opening statements. as morning kicked off with apple's lawyers giving their perspective. and you have a consortium of foxconn and others. we were 10 minutes away from qualcomm finishing their prepared opening remarks that news came in about the settlement.
emily: you were on the show previewing what was going to happen. jury selection was happening. are you surprised they came to terms after all this bitterness? >> remember what we said yesterday? look, this is business and it will work itself out. we have seen this kind of bitterness transform to a collaborative relationship. that appears to be what we have here. emily: apple and qualcomm released a joint statement. they reached a six-year licensing agreement including a multi-year chipset licensing agreement.
>> the only clue we have so far is that qualcomm will be a two dollars. it looks like apple has agreed to pay roughly the same licensing that everybody else has to pay. if that is the case, it is a victory for qualcomm. emily: can you put that into billions for me? >> qualcomm is earning roughly two dollars a share, so four dollars a share on eps is adding 50%. that's a lot of money. emily: is this apple waving the white flag and giving in? mark: not really apple giving in, but apple putting the consumer ahead of litigation. this seems to be an actually important fight for tim cook personally. apple going after qualcomm for what they believe is double dipping. and more so now, they realize that they need to be in 5g.
they don't think intel is capable of giving them the 5g modems as early as next year that intel and apple had been anticipating. it means the chip efforts are likely a ways off. apple will have its own modems ready. emily: a couple were expected to testify during this trial which upped the ante. qualcomm says these are the rules and i'm sorry, you have to pay. that is not going to change. >> there was an ftc trial accusing qualcomm of the practices you just mentioned. we still don't have the results. we have to see how that will
play out. fundamentally, you have technology, you have licensing. qualcomm has faced a series of legal challenges trying to get those licenses reduced. they have managed, by and large, to fend them off. we will see more as companies come and go in terms of the power of their customer base. it helps their profits. emily: mark, you had said that apple was promoting 5g this year, maybe next year. could it be sooner? could it be unveiled in the fall? mark: it is too late for apple barring some miracle of engineering. i don't see there being a chance
that apple has a 5g device on the market this year. it will be around the september through november iphone cycle, iphone 12 or whatever they choose to call it. there is concern about them getting the right amount of chips from intel. it is now under an agreement. >> these things take about 15 months. nevermind integrating into the device and writing the software. it is not going to happen this year. it can't. there's not enough time. emily: mark gurman and ian king. consumers will finally be able to buy samsung's foldable phone. we got a sneak peek. this is bloomberg. ♪
emily: it is one of samsung's boldest devices to date. the company unveiled the fold phone that can be a tablet or a phone with a price tag of $2000. mark gurman got his hand on the device. mark: remember when they launched giant smartphones and a group of people thought it was a gimmick? samsung is hoping that will happen again and turned mainstream. this is the galaxy fold. you can run three applications at once. the user interface is fairly intuitive. it is not as consistent as i would like going from the smaller screen to the bigger screen but i have a feeling it will get better over time as they continue to invest. when you open it up, it is basically a tablet. it is almost the size of the ipad mini. it has an in screen fingerprint scanner.
there is a 5g version coming for international markets. this goes on sale on the u.s. -- in the u.s. in april. there is silver, dark gray and black, a green color that almost looks gold. users will probably like this thing for the multitasking. you can have three applications at once. you could be watching a video while looking through your calendar and taking notes. are people going to want to buy these things so soon after they hit the market? i'm mark gurman for bloomberg news in new york. emily: coming up, netflix's forecast for user growth trails estimates. what it means for competitors like disney, next. and bloomberg is live streaming on twitter. follow our global news network tictoc on twitter.
♪ emily: welcome back to "best of bloomberg technology." netflix reports its first quarter results. last quarter was strong and the platform added 9.6 million customers. the forecast for the second quarter was underwhelming. netflix said they would add 5 million customers, short of the 6 million forecast. price increases will slow subscriber growth for a brief period but will not affect growth in the long run. what about the competition that
it might see from apple and disney? marian montaigne and andre swanston joined us on tuesday. andre: i think i may come off as very contrarian, but i almost did not care what netflix reported in q1 and their guidance for q2 is irrelevant to the long term outlook. netflix is facing huge headwinds when apple plus and disney plus, as well as the massive growth across free ad supported and connected tv solutions come in, i think q4 of this year is when they will for the first time have true head-to-head competition and it will be a challenge. emily: you are an investor in netflix. do you care? mariann: i care, and the way i see it as you will have some competition from apple but we do not know what it is. what they told us is slim. when it comes to disney, they can coexist with netflix. i do not think the parents will
be watching disney after 8:30 at night. that is not the history of computers and cable tv. those two together would still be under $20 a month and that is something they can coexist with. emily: i sat down with bob iger, the ceo of disney when they unveiled disney plus, and he talked about why he thinks the details of the service will be competition for netflix and all the rest. bob: making them available on a new technology platform that is simply more modern and growing in popularity, at a price that makes sense with a user interface that is beautiful, that is why we feel confident. emily: he is talking about the entire disney vault, animated classics going back decades as well as original content. will customers pay for that and netflix? andre: people like me that do
not even look at their bill can, but a lot of americans cannot afford and will prioritize. if we look at this as common sense, what business of any industry could you lose your best-selling product to the business right next to you and then they undercut you one price and it does not impact you? the real growth over connected tv over the last 24 months has been in ad supported solutions like pluto tv and others. what netflix benefited from was being the de facto standard across connected tv. now what people are saying across 35 million homes are you by those devices and turn on something free with ads, and you can be selective how you add on top of that.
for any home with the child, if you are prioritizing budget, do you prioritize disney's content library or the content that netflix has? it is not really just children. "the avengers" and others, netflix never had to face such direct competition. emily: disney has got the "star wars" library. netflix has got first movers. are you concerned about the forecast? slowing subscriber growth at the first time there could be direct competition? mariann: i would say now is a great time to be raising prices
because the unemployment rate is so low, the participation rate is so high, wage growth is improving, and if you are going to take a price increase, now is the time to take it. if it is one dollar or two a month, i do not think it will crush anyone's budget. they are growing very strongly overseas. they leveraged the heck out of there content by dubbing or subtitles, so things made in india will be shown here. there is a ton of leverage to be had out of the system, so we are positive on netflix. emily: how do you explain what happened today? shares plunged 9.6% after the results and now they have stabilized. what happened? mariann: you are asking me? emily: yes. mariann: people did not read through, and one of the things they did not read through was
they beat on subscribers in the u.s. and overseas. when you look at that guidance for the coming quarter of 5 million, that is right in line with the consensus numbers we have seen. it did not knock the cover off the ball, but it was in line. the management guidance the last few years has been conservative. they have the more common attitude of, we are going to guide down and then beat. this has been more frequent in their situation. we expect them to beat next quarter as well. emily: netflix is competing with companies with big budgets. apple has $250 billion in cash and they are investing multibillion dollars in original content over the next few years. can they spend their way ahead of the competition? andre: netflix had a huge head start in terms of investing heavily in content.
they will not spend their way out of this, because you cannot spend more than these other companies if they decide to dig in. there are opportunities netflix could take advantage of because they have been spending billions of dollars for years. some of the content that is older, they could make ad supported. that is more of a reality and i think that is a way they may go. people are overestimating the loyalty that people have to netflix or any content in particular. the turn rate is much higher across households that do not have a child across any subscription service than those that don't. a lot of things would be concerning, regardless of what their numbers are for q1 or q2. emily: marian montaigne of gradient investments and tru
optik ceo andre swanston. the billionaire founder of the company that assembles the iphone is planning to run for president of taiwan. terry gou will seek the nomination of the opposition kuomintang party. he said a mythical chinese sea goddess encouraged him to come forward to support peace with china. can the hr industry be transformed by cloud based services? one start-up is betting on it. we speak with the ceo of namely. this is bloomberg. ♪
emily: google and apple have complied with an indian court order to block downloads of the app tiktok after the government was concerned with illicit content. this move could handicap its owner in one of the most promising markets. i want to bring in mark bergen who has been reporting on this. interesting the indian government has intervened. the app has been concerning to a lot of people because you have a lot of children on this app, and concerns about sexual predators. mark: it is interesting on multiple levels. we have done some great reporting on india, companies in asia are adopting a more chinese model for the internet. india has a fairly conservative leading politicians, and they are going after a chinese company who has made a big push,
claiming to have 120 million active users, and one of the tech companies in china that has done well outside of china. this is an ai company that prides itself on its ability to take down content pretty quickly. emily: the case is still ongoing and they are optimistic about an opportunity that would be received by 120 million monthly active users in india. the concerns are that it is dangerous to children. how is this different from youtube where a parent can upload their video of a child? mark: right now, musically, which was the app that became tiktok, had a record fine around children's privacy concerns. groups are asking for lawmakers to look at youtube in a similar way.
emily: i want to ask about the notre dame situation. it is devastating watching notre dame getting essentially burned out, and in the middle of that on youtube, this box pops up that labels the burning of notre dame as fun-loving. what happened? mark: youtube said there was an algorithmic wrong call. the best we can decipher is their image recognition technology saw an image of a burning facade and the software determined it looked like an image of 9/11. emily: there could be lots of burning facades. mark: there are lots of cases where youtube over the years has been hammered for pushing conspiracy theories like 9/11 was an inside job. this is a precaution they are
taking. it goes back to the point with tiktok, a chinese company that prides itself on artificial intelligence, google is arguably the leading ai company and ai is not sufficiently there to solve the problem. they are saying 500 hours uploaded a minute, so if you have humans looking at that, this is an interesting case where this is a breaking news event and you would think someone in the company would say, let's look at all the videos of fire, because that is where people would be drawing attention. they are still relying on machines and software. emily: it is having to find -- thank you for that update. elon musk's spacex has won a nasa contract to play a
real-life version of the game asteroids. the goal -- to demonstrate the ability to deflect an asteroid by crashing a spacecraft into one at high speed. the test mission is targeted for a june 2021 launch on a spacex falcon nine. hr operations remain one of the biggest headaches in the workplace, but contact streamline how the ai industry works? namely thinks so, and offers a cloud-based platform for small to midsize business. 75% of their clients have increased employee engagement and 72% say it has made their employees more productive. elisa steele joined us on monday. elisa: our software is so different because it is a full solution for a midsize company. midsize companies have small hr departments but the same problems as a big enterprise. they have to drive employee engagements, understand data and
insight, and namely puts it together in a one stop shop. at the same time, we provide an engaging platform directly for the employees. emily: are you competing with folks like benefits, gusto, workday, or multiple hr? elisa: those companies do similar things but target from customers. we are targeting 100 to 1000 employees. it is usually a competitive situation of they have not adopted tech yet. emily: what is interesting about hr is that you are at a critical entry point where employees are coming into the organization and you are managing employees throughout the organization. as we talk about issues of bias in the corporate world, hr can play a critical role, as well as
technology hr representatives use. elisa: one of our newest and most popular products will provide data and insights to help them understand their workforce, and benchmark that against our other clients so they understand, how are we faring on pay equity come on diversity? how are we doing in promotional opportunities? they can look at that in the context of namely data and give themselves a scorecard. emily: talk about the biggest hurdles on it comes to modernizing hr and creating an hr workforce for the modern world. elisa: typically, hr has been in a function that has not been able to be measured well. emily: not that it is not prioritized. elisa: in midsize companies, they have a department of two if they are lucky, but they are trying to maintain the workforce, attract talent. it is really important for their
success. emily: you stepped into this role a few months ago and have just done a massive funding round. the ceo was pushed out after an investigation that showed absence inconsistent with namely. elisa: namely is a strong cultural value system and when an employee has behavior that does not align with that, they do not have a place at the company. i was on the board at the time, stepped in. i am happy to say i am there now as the ceo. emily: that was elisa steele, ceo of namely. everlywell wants to put health tests in the hands of consumers. how it is competing with the likes of 23 and me and other health startups. this is bloomberg. ♪
since 2015, it shipped over 275,000 kits and now the company have secured $50 million in new funding to expand their business platform. founder and ceo julia cheek joined us. julia: everlywell is transforming the $25 billion lab testing industry. the kits themselves are a way to make the process more accessible and convenient for consumers. we work with fully certified, regulated labs that have been around for a long time and are using existing technology to be able to make a service that is suitable for home kit collection by a consumer and mailed off and resulted in a certified lab. emily: tell us about the technology and how proven it is. any time you say at home testing kit, that can raise some alarm bells when you are doing
something outside the doctor's office. how proven is the technology? julia: everlywell is the connector. we are not inventing any new lab testing technology or assays, and all of the labs we work with preexist our company and have been in business years or decades. what we are making easier is the home collection process of a sample, using materials that have been validated and are clear for use. the testing itself is just as accurate as the same test that your doctors and physicians typically use, and we work with an independent physician network to review the orders and results, as well as work with physicians across the country that consumers share their results with. emily: your tests are not fda approved and some of the critics
say this is the way to get around fda approval. julia: laboratory testing in the united states is regulated by two federal bodies, fda and the center for medicare and medicaid services. cms regulates the test everlywell offers. that is generally through a body of legislation. all of the labs we work with meet and exceed federal regulations for lab testing, as well as meet or exceed the state-by-state regulations. should the fda choose to regulate our type of lab testing, we would be excited to engage. emily: how do people understand what the test results show, other they really have a food sensitivity or if it is a sign of something like cancer or an eating disorder? can the tests tell you that? julia: we are making it accessible for consumers to get accurate, insightful, and clear
lab results that are reviewed by board-certified physicians, and available and encouraged to be shared with consumers' primary care physicians. 80% of our customers have a primary care physician and 60% report using these results directly with their physician. it closes the care gap of consumer compliance around lab testing. 40% of americans do not get testing for fear of cost, and we hope to increase that rate so it is useful for people, and then they can work in conjunction with their health care provider to improve their health. emily: if you like it or not, you are compared to theranos all the time. i realize they were creating technology and you are not.
the sort of spectacular failure of theranos is very fresh in the health tech industry. what can you say to assure consumers and your customers that everything you are providing them is sound? julia: the most important point on the everlywell brand is the network of labs we partner with work already with physicians and hospitals and existed before we had this digital model to allow consumers to initiate test orders. they are relied upon by many of the top physician networks in the country and we work with a large labs in the country as well. obviously, there has been parallels made, but the most important point is we are really connecting people to proven technology, similar to what a warby parker model did, connecting people to more
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♪ david: since you have been a leader in the house, you have dealt with three presidents. speaker pelosi: i completely and entirely respect the office of the president of united states. david: there was a tax cut in the first year of president trump's administration. speaker pelosi: this tax bill is a tax scam of the highest magnitude. david: would you call mr. mcconnell and say let's have coffee and talk about where things are going? speaker pelosi: i don't much like coffee. [laughter] david: you have been vilified by the republicans. speaker pelosi: once you get in that arena, you have to be prepared to take a punch. or prepared to throw a punch too. >> would you fix your tie, please? david: well, people wouldn't recognize me if my tie was fixed, but ok. just leave it this way. alright.